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EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
November ____, 1997, by and among COMPLETE BUSINESS SOLUTIONS, INC., a Michigan
corporation (the "Company"), XXXX XXXXXXXX and the SSI GRANTOR RETAINED ANNUITY
TRUST II (individually, a "Shareholder" and collectively, the "Shareholders"),
each of whom is a shareholder of Synergy Software, Inc., an Illinois
corporation ( "Synergy").
WHEREAS, the parties to this Agreement are parties to an Agreement and
Plan of Merger of even date herewith (the "Merger Agreement"), pursuant to
which a wholly-owned subsidiary of the Company will be merged into Synergy and,
in connection therewith, the Company shall issue shares of its Common Stock (as
defined below) to the Shareholders. Pursuant to the Merger Agreement, the
Company has agreed to provide the registration rights set forth in this
Agreement to the Shareholders. Unless otherwise provided in this Agreement,
capitalized terms used herein shall have the meanings set forth in paragraph 1
hereof.
NOW, THEREFORE, the parties hereto agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall have the
meanings ascribed to them below:
(a) "Business Day" means any Monday, Tuesday, Wednesday, Thursday or
Friday that is not a day on which the New York Stock Exchange or Nasdaq Stock
Market, are authorized by law, regulation or executive order to close.
(b) "Common Stock" means the common stock, no par value, of the Company.
(c) "Prospectus" has the meaning given to such term in Section 2.
(d) "Registration Statement" shall have the meaning set forth in Section
2.
(e) "Merger Stock" means the shares of Common Stock issued to the
Shareholders pursuant to the Merger Agreement.
(f) "Piggyback Prospectus" has the meaning set forth in Section 5.
(g) "Piggyback Registration Statement" has the meaning set forth in
Section 5.
(h) "Person" means any individual, corporation, partnership, limited
partnership, limited liability company, or other business entity.
(i) "Registration Expenses" means all expenses incurred by the Corporation
in complying with Section 2.2(b) hereof, including without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company and all independent certified public accountants and
blue sky fees and expenses.
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(j) "Registrable Securities" means (x) the shares of Merger Stock and (y)
any securities issued or issuable in respect of or in exchange for any of the
shares of Merger Stock referred to in clause (x) by way of a stock dividend or
stock split or in connection with a combination of shares of Merger Stock,
recapitalization, reclassification, merger, consolidation, or exchange offer
("Distribution Securities"). For purposes of this Agreement, a Registrable
Security ceases to constitute a Registrable Security (i) when such Registrable
Security shall have been effectively registered under the Securities Act and
disposed of in a public market transaction pursuant to the Registration
Statement, (ii) when such Registrable Security shall have been sold pursuant to
Rule 144 (or any successor provision) under the Securities Act, (iii) when such
Registrable Security shall have been otherwise transferred and a new
certificate for such Registrable Security not bearing a legend restricting
further transfer shall have been delivered by the Company following the
Company's receipt of an opinion of inside or outside counsel reasonably
satisfactory to it that the issuance and delivery of such a certificate is
legal and proper under this Agreement and applicable law, (iv) with respect to
a particular Shareholder, on the date on which all of such Shareholder's
remaining Registrable Securities could be sold in a single transaction in
compliance with Rule 144 under the Securities Act, or (v) when such Registrable
Security shall have ceased to be outstanding.
(k) "Securities Act" means the Securities Act of 1933, as amended.
(l) "Termination Date" means the first date on which no Registrable
Securities are outstanding.
Other terms shall have the meaning ascribed to them in the recitals and
other sections of this Agreement.
2. PIGGYBACK REGISTRATIONS.
(a) Notice. Whenever the Company proposes to register any of its Common
Stock under the Securities Act for sale in an underwritten public offering,
other than pursuant to a registration on Form S-8 or Form S-4, or any other
form which in the future may be approved by the SEC in lieu of such forms for
the same purposes (a "Piggyback Registration"), the Company will give prompt
written notice to all holders of Registrable Securities of its intention to
effect such a registration and will, subject to Sections 3(c) and 3(d), include
in such registration all Registrable Securities with respect to which the
Company has received written requests for inclusion therein within 15 days
after the receipt of the Company's notice
(b) Piggyback Expenses. The Registration Expenses of the holders of
Registrable Securities will be paid by the Company in all Piggyback
Registrations provided, however, that the holders of Registrable Securities
shall pay all underwriting discounts and selling commissions applicable to
Registrable Securities offered by them pursuant to the terms of this agreement.
(c) Priority in Primary Registrations. If a Piggyback Registration is an
underwritten offering on behalf of the Company, and the managing underwriters
advise the Company in writing that in their opinion the number of securities
requested to be included in such registration
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exceeds the number which can be sold in such offering without adversely
affecting the marketability of the offering, the Company will include
securities in such registration in the following order of priority: (i) first,
the securities the Company proposes to sell, and (ii) second, the Registrable
Securities requested to be included in such registration by the Shareholders
and all Common Stock requested to be included in such registration by other
holders of Common Stock having registration rights (the "Other Common Stock"),
pro-rata based on the respective number of shares of Common Stock requested to
be included therein by each Shareholder and other holders of Common Stock.
(d) Priority in Secondary Registrations. If a Piggyback Registration is
an underwritten secondary offering on behalf of holders of the Company's
securities, and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering without
adversely affecting the marketability of the offering, the Company will include
securities in such registration in the following order of priority: (i) first,
the securities requested to be included in such registration by the holders
requesting such registration, (ii) second, the Registrable Securities requested
to be included in such registration by the Shareholders and all Other Common
Stock requested to be included in such registration by other holders of Common
Stock having registration rights (except for such Common Stock included in the
immediately preceding clause (i), pro-rata based on the respective number of
shares of Common Stock requested to be included therein by each Shareholder and
other holder of Common Stock, and (iii) third, additional securities of the
Company requested to be included in such registration.
(e) Notwithstanding the foregoing provisions of this Section 2, for any
Piggyback Registration occurring prior to July 1, 1998 the minimum number of
shares of Registrable Securities which the Shareholders shall have the right to
include in any such Piggyback Registration shall be equal to the lesser of (a)
500,000 shares (as adjusted for stock splits, combinations and
reclassifications) and (b) 25% of the total number of shares included in any
such registration. For any Piggyback Registration occurring on or after July
1, 1998 the minimum number of shares of Registrable Securities which the
Shareholders shall have the right to include in any such Piggyback Registration
shall be equal to the lesser of (a) 250,000 shares (as adjusted for stock
splits, combinations and reclassifications) and (b) 25% of the total number of
shares included in any such registration.
3. HOLDBACK AGREEMENTS. If a holder of Registrable Securities includes
Registrable Securities in an underwritten Piggyback Registration, such holder
of Registrable Securities agrees not to effect any public sale or distribution
(including sales pursuant to Rule 144) of equity securities of the Company, or
any securities convertible into or exchangeable or exercisable for such
securities, during the seven days prior to and the 90-day period beginning on
the effective date of any underwritten Piggyback Registration in which
Registrable Securities held by such holder are included (except as part of such
underwritten registration), unless the underwriters managing the registered
public offering otherwise agree.
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4. REGISTRATION PROCEDURES.
(a) Company Procedures.
(i) Whenever this Agreement requires, or the holders of Registrable
Securities have requested (as permitted hereunder), that any Registrable
Securities be registered pursuant to this Agreement, the Company will use
all reasonable efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended method of disposition
thereof, and pursuant thereto the Company will, as expeditiously as
possible:
(A) prepare and file with the Securities and Exchange Commission a
Registration Statement with respect to such Registrable Securities and
use all reasonable efforts to cause such registration statement to become
effective as soon as practicable thereafter (provided that before filing
a registration statement or Prospectus or any amendments or supplements
thereto, the Company will furnish, at least five Business Days prior to
such filing, to the counsel selected by the holders of a majority of the
Registrable Securities offered by such registration statement, copies of
all such documents proposed to be filed which documents will be subject
to the review of such counsel and which review shall be completed no
later than two Business Days prior to the proposed filing date);
(B) prepare and file with the Securities and Exchange Commission
such amendments and supplements to such Registration Statement and the
Prospectus used in connection therewith (the "Prospectus") as may be
necessary to keep such Registration Statement effective for a period of
not less than ninety (90) days and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered
by such Registration Statement during such period;
(C) furnish each seller of Registrable Securities such number of
copies of such Registration Statement, each amendment and supplement
thereto, the Prospectus included in such Registration Statement
(including each preliminary Prospectus) and such other documents as such
seller may reasonably request in order to facilitate the disposition of
the Registrable Securities owned by such seller;
(D) use all reasonable efforts to register and qualify such
Registrable Securities under the securities or blue sky laws of such
states and the District of Columbia as any seller of Registrable
Securities reasonably requests and do any and all other acts and things
which may be reasonably necessary or advisable to enable such seller to
consummate the disposition in such states and the District of Columbia of
the Registrable Securities owned by (such seller provided that the
Company will not be required to (i) qualify generally to do business in
any jurisdiction where it would not otherwise be required to qualify but
for this subparagraph, (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction);
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(E) notify each seller of such Registrable Securities of the
happening, of any event of which the Company becomes aware, as a result
of which the prospectus included in such Registration Statement contains
an untrue statement of a material fact or omits any fact necessary to
make the statements therein not misleading, and, at the request of any
such seller, as promptly as is practicable, the Company will prepare a
supplement or amendment to such Prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such
Prospectus will not contain an untrue statement of a material fact or
omit to state any fact necessary to make the statements therein not
misleading;
(F) notify each seller of any securities covered by such
Registration Statement (A) when such Registration Statement, or any
post-effective amendment to such Registration Statement, shall have
become effective, or any amendment of or supplement to the Prospectus
used in connection therewith shall have been filed, (B) of any request by
the Securities and Exchange Commission to amend such Registration
Statement or to amend or supplement such Prospectus or for additional
information, (C) of the issuance by the Securities and Exchange
Commission of any stop order suspending the effectiveness of such
Registration Statement or of any order preventing or suspending the use
of any preliminary prospectus, and (D) of the suspension of the
qualification of such securities for offering or sale in any
jurisdiction, or of the institution of any proceedings for any of such
purposes; (E) of the happening of any event that makes any statement made
in such Registration Statement, any then effective Prospectus or any
other document incorporated therein by reference untrue or that requires
the making of any changes in such Registration Statement, Prospectus or
any document incorporated therein by reference in order that such
documents not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and (F) of the Company's
determination that a further post-effective amendment to such
Registration Statement would be appropriate;
(G) use reasonable efforts to cause all such Registrable
Securities to be listed on the NASD automated quotation system;
(H) otherwise use all reasonable efforts to comply with all
applicable rules and regulations of the Securities and Exchange
Commission, and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at
least twelve months beginning with the first day of the Company's first
full calendar quarter after the effective date of the Registration
Statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder; and
(I) in the event of the issuance of any stop order suspending the
effectiveness of a Registration Statement, or of any order suspending or
preventing the use of any related Prospectus or suspending the
qualification of any common stock included in such Registration Statement
for sale in any jurisdiction, the Company will use all reasonable efforts
promptly to obtain the withdrawal of such order.
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(b) Shareholder Procedures.
(i) In connection with any Registration Statement, the Company may
require each Shareholder to furnish to the Company such information
regarding such Shareholder and his or her proposed distribution of
Registrable Securities, to the extent necessary to comply with the
Securities Act, as the Company may from time to time reasonably request in
writing.
(ii) Each Shareholder agrees to cooperate and timely provide the
Company in all reasonable respects in connection with the preparation and
filing of each Registration Statement and any amendment thereof, any
Prospectus relating thereto and any Prospectus supplement relating thereto
with respect to the offer and sale of Registrable Securities of such
Shareholder.
5. REGISTRATION EXPENSES.
(a) Payment by Selling Shareholders. To the extent Registration Expenses
are not required to be paid by the Company, each holder of securities included
in any registration hereunder will pay those Registration Expenses allocable to
the registration of such holder's securities so included, and any Registration
Expenses not so allocable will be borne by all sellers of securities included
in such registration in proportion to the aggregate selling price of the
securities to be so registered.
6. INDEMNIFICATION.
(a) Company Indemnification. The Company shall indemnify and hold
harmless, to the fullest extent permitted by law, each seller of Registrable
Securities, any underwriter for such registration and each person or entity, if
any, controlling such seller or underwriter within the meaning of the
Securities Act or the Exchange Act against all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation and legal
expenses) to which such seller, underwriter or controlling person or entity, as
the case may be, may become subject under the Securities Act, the Exchange Act
or other federal or state law, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) arise out of or are
based upon any of the following (collectively, "Violations"):
(i) any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement, any Prospectus or any amendments or
supplements thereto;
(ii) the omission or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading; or
(iii) any violation or alleged violation by the Company, in connection
with such registration, of the Securities Act, the Exchange Act, any state
securities law or any rule
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or regulation promulgated under the Securities Act, the Exchange Act or any
state securities law;
provided, however, that the Company shall not be liable in any such case
for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished for use in connection with such
registration by any such seller, underwriter or controlling person or entity.
(b) Selling Shareholder Indemnification. Each seller of Registrable
Securities shall indemnify and hold harmless, to the fullest extent permitted
by law, the Company, its officers, directors, employees, representatives and
agents, and each Person who controls (within the meaning of the Securities Act)
the Company, against all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation and legal expenses) resulting from
any untrue or alleged untrue statement of a material fact contained in any
Registration Statement, any Prospectus, or any amendment or supplement thereto,
and any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, only to the extent
the same arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact or any omission or alleged omission to state a
material fact in such Registration Statement, Prospectus, amendment or
supplement, as the case may be, made or omitted, as the case may be, in
reliance upon and in conformity with written information furnished to the
Company by such seller for use therein, or if such offering is not an
underwritten offering, by such seller's failure to deliver a copy of the
Registration Statement, Prospectus or any amendment or supplement thereto after
the Company has furnished such seller with a sufficient number of copies of the
same. In no event shall any indemnification obligation under this Section 6(b)
or by any seller under Section 6(d) exceed the net proceeds from the offering
received by such seller.
(c) Notice of Claim. Each party entitled to indemnification under this
Section 6 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may
be sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom; provided, that counsel for
the Indemnifying Party, who will conduct the defense of such claim or
litigation, is approved by the Indemnified Party (whose approval will not be
unreasonably withheld or delayed); and provided, further, that the failure of
any Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations except to the extent that its defense of
the claim or litigation involved is prejudiced by such failure. The
Indemnified Party may participate in such defense at such party's expense. No
Indemnifying Party, in the defense of any such claim or litigation, except with
the consent of each Indemnified Party, shall consent to entry of any judgment
or enter into any settlement that does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability in respect of any claim or litigation, and no
Indemnified Party will consent to entry of any judgment or settle any claim or
litigation without the prior written consent of the Indemnifying Party. Each
Indemnified Party shall furnish such information regarding himself, herself or
itself and the claim
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in question as the Indemnifying Party may reasonably request and as shall be
reasonably required in connection with the defense of such claim and litigation
resulting therefrom.
(d) Contribution. If for any reason the indemnification provided for in
this Section 6 from an Indemnifying Party, although otherwise applicable by its
terms, is determined by a court of competent jurisdiction to be unavailable to
an Indemnified Party hereunder, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by the Indemnified Parties as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of such Indemnifying Party and the Indemnified Parties in
connection with the actions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and the
Indemnified Parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue
statement of a material fact, has been made by, or relates to information
supplied by, such Indemnifying Party or the Indemnified Parties, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
Section 6(c), any legal or other fees or expenses reasonably incurred by such
party in connection with any investigation or proceeding.
7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Person may participate in
any registration hereunder which is underwritten unless such Person (a) agrees
to sell such Person's securities on the basis provided in any underwriting
arrangements approved by the Company and other Person or Persons entitled
hereunder to approve such arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements.
8. REPORTS UNDER EXCHANGE ACT. With a view to making available to the holders
of the Registrable Securities the benefits of Rule 144 and any other rule or
regulations of the Securities and Exchange Commission that may at any time
permit a holder to sell securities of the Company to the public without
registration, the Company agrees to use its reasonable best efforts to do all
of the following:
(a) Public Information. Make and keep public information available as
contemplated in Rule 144, at all times;
(b) SEC Reports. File with the Securities and Exchange Commission all
reports and other documents required of the Company under the Securities Act
and the Exchange Act; and
(c) Rule 144 Statement. Furnish to any holder, so long as such holder
owns any of the Registrable Securities, forthwith upon request a written
statement by the Company that it has complied with the reporting requirements
of Rule 144, the Securities Act and the Exchange Act (at any time after it has
become subject to such reporting requirements), a copy of the most recent
annual or quarterly report of the Company and such other reports and documents
so filed with the Securities and Exchange Commission by the Company as may be
reasonably requested
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in availing any holder, under any rule or regulation of the Securities and
Exchange Commission, of the right to sell any such Registrable Securities
without registration.
9. MISCELLANEOUS.
(a) No Inconsistent Agreements. The Company will not hereafter enter into
any agreement with respect to its securities which violates the rights granted
to the holders of Registrable Securities in this Agreement.
(b) Remedies. Any Person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and
to exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.
(c) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and holders of at least a majority of the then
outstanding Registrable Securities.
(d) Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will bind and inure to
the benefit of the respective successors and permitted assigns. No Shareholder
may assign his or her rights or obligations under this Agreement without the
prior written consent of the Company which consent shall not be unreasonably
withheld, except that a Shareholder may transfer its rights to members of his
immediate family or trusts for their benefit without such consent.
(e) Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the
remainder of this Agreement.
(f) Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together will constitute one
and the same Agreement.
(g) Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
(h) Governing Law. The corporate law of Delaware will govern all issues
concerning the relative rights of the Company and its stockholders. All other
questions concerning the construction, validity and interpretation of this
Agreement and the exhibits and schedules hereto will be governed by the
internal law, and not the law of conflicts, of Michigan.
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(i) Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to the
recipient, one business day after being sent to the recipient by reputable
express courier service (charges prepaid) or three business days after being
mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid. Such notices, demands and other communications
will be sent to (x) a Shareholder at such Shareholder's address on the
signature pages hereto, or (y) to the Company at the address indicated below:
If to the Company:
Complete Business Solutions, Inc.
00000 Xxxx Xxxxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Attn.: Xxxxxxx Xxxxxx
Fax: 000-000-0000
With a copy to:
Butzel Long.
000 Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxxxx, XX, Esq.
Fax: (000) 000-0000
If to SSI Grantor Retained Annuity Trust II
copy to:
Xxxxxx X. Xxxxxxxxx
Mercury Capital Management L.L.C.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, Xx 00000
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
COMPLETE BUSINESS SOLUTIONS, INC.
By: _______________________________________
Its: _______________________________________
Shareholders:
_______________________________________
Xxxx XxXxxxxx
Address: ________________________________________
Fax: ________________________________________
_______________________________________
by: SSI Grantor Retained Annuity Trust,
Xxxxxx X. Xxxxxxxxx, Trustee
Address: ________________________________________
Fax: ________________________________________
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